Case Law Details
Estate of Late Vrajlal Mehta Vs ACIT (ITAT Mumbai)
We noticed that explanation of the assessee that two bank accounts belonged to Shri Rajesh Mehta have been accepted by the search officials as well as Assessing Officer. We notice that the balance available in those bank accounts have been assessed by the learned CIT(A) only, that too for want of certain documents. It has been submitted that the assessee is in process of obtaining those documents from Shri Rajesh Mehta. We noticed that the assessee has already paid a sum of Rs. 2 crores and further a sum of Rs. 85.84 lakhs requires adjustment. Under these set of facts, we are of the view that the balance of convenience is in favour of granting partial stay to the assessee. Accordingly we direct the assessee to pay a sum of Rs. 1.20 crores in quantum proceedings, which may be paid in two equal installments. The first installment shall be paid on or before 31st December, 2017 and the second installment shall be paid on or before 15th January, 2018. Since penalty demand is the result of enhancement, we are of the view that the same may be stayed fully. Accordingly, subject to the payment of above said instalments, we direct the Revenue not to enforce the collection of outstanding demand in the case of quantum appeal proceeding as well as in the penalty proceedings till the disposal of the appeals of the assessee or till six months from the date of this order, whichever period expires earlier. We also find merit in the plea of the assessee that both these appeals should be heard on out of turn basis. Accordingly we direct the Registry to post both these appeals for final hearing on 18.1.2018.
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
The assessee has moved both these stay applications seeking stay of outstanding demand raised in quantum appeal proceedings and penalty proceedings. Both the stay applications relate to A.Y. 2007-08.
Learned AR submitted that the Revenue carried out search and seizure operation in the case of Shri Anoop Mehta and his group. During the course of search, certain documents showing availability of bank accounts with HSBC Bank, Geneva in the name of following concerns were shown to Shri Anoop Mehta:
- Yeel Investment Inc
- Euro Investment Ltd
- Investment Lexcor S.A.
Shri Anoop Mehta’s brother named Shri Rajesh Mehta, who was residing in Dubai, owned up two bank accounts held in the name of Euros Invest limited and Investment Lexcor S.A. It was noticed that the third company named Yeel
Investment Inc belonged to the father of Shri Anoop Mehta, named Shri Vrajlal Mehta, who had expired long back. Accordingly, executors of the Estate of late Shri Vrajlal Mehta took steps to bring money lying in the HSBC bank, Geneva into India. Monies were remitted from HSBC Bank Geneva to the account of Estate of late Shri Vrajlal Mehta during the financial year relevant to A.Y. 2012-13 and said receipts were offered as income in A.Y. 2012-13.
3. The Assessing Officer reopened the assessment of the year under consideration, viz., A.Y. 2007-08 since certain monies were found deposited during the year relevant to A.Y. 2007-08. Though, the entire receipts received from the HSBC bank was offered as income in A.Y. 2012-13, yet in order to buy piece of mind, returns were filed for A.Y. 2007-08 offering the deposit amounts as income. The Assessing Officer completed the assessment by making certain additions, which were challenged before the learned CIT(A). The learned CIT(A) enhanced the income of the assessee by including the amount found in the accounts of other two concerns, which were owned up by Shri Rajesh Mehta. The said enhancement has resulted in additional demand of tax. The Ld CIT(A) also levied penalty u/s 271(1)(c) of the Act.
4. The present stay applications are related to the demand arising on account of enhancement made by Ld CIT(A) and also related to penalty levied by him u/s 271(1)(c) of the Act. It is pertinent to note that the assessee has already paid a sum of Rs. 2 crores towards outstanding demand in quantum proceedings and balance amount of Rs. 98 crores is outstanding. Against the penalty demand, the assessee has not paid anything.
5. The Learned AR submitted that the assessee has already filed Affidavit and confirmation obtained from Shri Rajesh Mehta with regard to two accounts, since he had owned up bank accounts. Since the assessee could not produce additional documents that were called for by the learned CIT(A) during the course of appellate hearing, the learned CIT(A) has enhanced the assessment by adding the deposits found in the said bank accounts. The Learned AR submitted that the assessee has already taken steps to collect all the documents that were called for by the learned CIT(A).
6. The Learned AR further submitted that the Investigation Wing of the Department as well as the Assessing Officer has accepted the submission of the assessee that the above said two bank accounts actually belong to Shri Rajesh Mehta. It is only the learned CIT(A), who did not accept said fact for want of certain documents. He submitted that the assessee is expected to receive documents shortly and accordingly submitted that the assessee should be in a position to prove that the above said two bank accounts do not belong to it. He submitted that the penalty order is the result of enhancement made Ld CIT(A) and it has been passed by him without waiting for outcome of the order passed by ITAT. He submitted that the penalty is liable to be deleted, if the main addition gets deleted, on which the assessee is very hopeful of. Accordingly he prayed for complete stay of outstanding demand and also asked for early hearing of the matter.
7. The Learned Departmental Representative, on the contrary, strongly objected to the prayer of the assessee. He submitted that the assessee’s family has already accepted the bank accounts and the learned CIT(A) has made the impugned addition, since the assessee could not prove its claim that two bank accounts belonged to Shri Rajesh Mehta. Accordingly, he submitted that the assessee should not be granted complete stay.
8. In the rejoinder, the learned AR submitted that the assessee has already paid a sum of Rs. 44 lakhs in A.Y. 2012-13, which would be required to be refunded, since the same income cannot be assessed in two years. He submitted that the assessee has already moved a petition before the Assessing Officer to reduce the income in AY 2012-13 to the extent offered in other years. He further submitted that the assessee has also paid a sum of Rs. 33.40 lakhs towards liability of AY 2007-08 on 25.3.2015, which has not been given credit so far. Accordingly, he submitted that the assessee has already paid a sum of ` 85.84 lakhs over and above Rs. 2 crores paid by the assessee.
9. It is noticed that the Ld CIT(A) was constrained to make the addition, since the addition has been made for non-submission of certain documents. Though it is submitted that the assessee has taken steps to collect those documents, yet the fact remains that the assessee has not yet received the same. When these facts were pointed out, the Learned AR submitted that the bench may take liberal view in this matter since, upon submission of additional evidences, the matter is ultimately required to be restored back to the file of the Assessing Officer for examination of the new evidences that were filed by the assessee in which case, existing demand will cease to exist.
9. We heard the rival submissions and perused the record. As pointed out by learned AR, we noticed that explanation of the assessee that two bank accounts belonged to Shri Rajesh Mehta have been accepted by the search officials as well as Assessing Officer. We notice that the balance available in those bank accounts have been assessed by the learned CIT(A) only, that too for want of certain documents. It has been submitted that the assessee is in process of obtaining those documents from Shri Rajesh Mehta. We noticed that the assessee has already paid a sum of Rs. 2 crores and further a sum of Rs. 85.84 lakhs requires adjustment. Under these set of facts, we are of the view that the balance of convenience is in favour of granting partial stay to the assessee. Accordingly we direct the assessee to pay a sum of Rs. 1.20 crores in quantum proceedings, which may be paid in two equal installments. The first installment shall be paid on or before 31st December, 2017 and the second installment shall be paid on or before 15th January, 2018. Since penalty demand is the result of enhancement, we are of the view that the same may be stayed fully. Accordingly, subject to the payment of above said instalments, we direct the Revenue not to enforce the collection of outstanding demand in the case of quantum appeal proceeding as well as in the penalty proceedings till the disposal of the appeals of the assessee or till six months from the date of this order, whichever period expires earlier. We also find merit in the plea of the assessee that both these appeals should be heard on out of turn basis. Accordingly we direct the Registry to post both these appeals for final hearing on 18.1.2018.
10. Since the date of hearing is announced in the open court in presence of both the parties, the Registry may desist from issuing formal notice of hearing to the parties. We also direct the assessee not to seek adjournment on the above said date of hearing without reasonable cause, failing which this stay order shall be subjected to review by the Division Bench hearing the appeals.
11. In the result, the stay application in S.A. No. 533/Mum/2017 is partly allowed and other stay application is allowed.
Order has been pronounced in the Court on 20.12.2017.
